Access to primary, secondary and direct investments across infrastructure, real estate and natural resources
The Real Assets Investment Team focuses on global real asset investment opportunities that have the potential to generate consistent distribution yields and compelling risk-adjusted total returns. We remain highly selective, while seeking to deploy capital in situations in which we believe we have a competitive advantage in gaining access to and evaluating high-quality assets alongside leading general partners and operators. We believe this approach, coupled with thoughtful and deliberate portfolio construction, provides our clients with diversified and well-managed exposure to global real assets.
- Highly selective, investing in only ~1% of $190.3B+ worth of transactions reviewed from 2020-2023
- Actively investing in real assets since 1999, the team today manages more than $15.2B+ of AUM and $179.8B+ of AUS
- Unique access within the sector due to investment relationships with 550+ individual managers, leading to visibility on differentiated, often off-market opportunities across sub-sectors1
1As of 3/31/2024. Includes any investment with an investment strategy of real estate, infrastructure, or natural resources.
Deal Spotlights
Project Ocelot
Who they are
Turnkey commercial and industrial wastewater treatment to commercial and industrial customers across 29 sites with 20-year contracts, in addition to 21 different patents protecting its proprietary process.
Why it matters
The company offers a win-win solution for customers, with an average estimated savings of 30% compared to municipal solutions and strong environmental benefits while providing highly attractive unlevered contractual returns to the company.
The bottom line
Ocelot benefits from a wide addressable market where essentially all C&I water users are potential clients, especially in U.S. regions with particularly high water and wastewater rates where potential customers can see the largest immediate economic benefit, including the West Coast, the South, and much of the Northeast. Additionally, substantial growth opportunities exist in the expansion of the current customer base where the current penetration rates are less than 20%.The HL advantage
We have had a long-standing relationship with the sponsor from their prior firm and through previous co-investments, leading us to being included as an early call for capital.Project Jules
Who they are
A leading data center platform focusing on high-performance computing and traditional colocation with a current footprint in the UK, Iceland and Finland.
Why it matters
Demand for high-performance computing in Europe is expected to grow at a ~27% CAGR over the next decade, driven by digitization, an increase in artificial intelligence usage and an Internet of Things expansion.
The bottom line
The Company has a strong position in the Nordic market, which is uniquely suited to provide data center services and support energy-intensive workloads given its climate and access to renewable power. At entry, the Company had ~28MW of contracted capacity, with sites powered by nearly 100% renewable energy via hydroelectric and geothermal power. Approximately 80% of revenues are generated through long-term contracts with blue chip counterparties and feature inflation escalators.The HL advantage
We had previously conducted diligence on the asset as part of a larger portfolio transaction, allowing for advantaged insights and access to the deal sponsor.Project Polaris
Who they are
A leading, independent renewable power producer across Italy, the U.S., Japan and India that has developed and built 15GW and 13GW of solar energy, respectively.
Why it matters
Ambitious targets for sourcing renewable power are being set across the globe due to increasing demand and net-zero emission targets. The company will benefit from incentives such as the REPowerEUplan and the U.S. Inflation Reduction Act.
The bottom line
The company has a strong asset base, with 1.3GW of solar PV assets in operation and late-stage construction, in addition to durable cash flows through 10 to 25-year PPA or tariff agreements. It also had an additional 400MW of capacity expected to achieve CoD in 2024 and 2025 for additional upside. This was an oversubscribed opportunity structured as preferred equity with a mid-teens target return.
The HL advantage
Despite limited capacity, we gained significant allocation to the opportunity through our long-standing relationship with the sponsor.
We leverage our global platform, information advantages and deep sector expertise in real estate, infrastructure and natural resources to identify what we believe to be the best risk-adjusted investment opportunities for our clients and managed accounts.
Head of Infrastructure and Real Assets
Greater insight driven by a robust technology platform
Our continued investment in private markets technology solutions provides unparalleled access to information including a database with more than 22,200 funds, 14,500 unique managers, and 160,800+ companies, properties and assets. Further, each year the firm participates in over 1,300 meetings with general partners on average, and reviews 1,100+ PPMs. Together, these insights help enable us to be a more informed investor and a valuable strategic partner to managers, thereby providing access to unique opportunities.
As of 6/30/2024